June 24, 2020 / 5:29 PM / 19 days ago

France to rein in reduced-time work scheme as covid crisis eases

PARIS (Reuters) - The French government laid out plans on Wednesday to rein in from October a reduced-time work scheme set up during the coronavirus crisis to prevent mass permanent layoffs.

The scheme’s update comes as France and other European countries that set up furlough schemes to save jobs grapple with how to encourage firms to put workers back into their jobs despite a still fragile economic outlook, while keeping down the cost to the public purse.

Companies had put 7.8 million workers on furloughs or reduced schedules as of the end of May, Labour Minister Muriel Penicaud said last week.

From Oct. 1, workers will get 60% of their normal gross wages under the scheme, down from 70% currently, President Emmanuel Macron told employers and unions. Meanwhile, the state will reimburse employers up to 60% of the cost, instead of 85% currently.

However, a company can only tap the existing furlough arrangements for up to six months, and on Wednesday the government also outlined a new longer-term programme that is more generous for the employee and company, but demands commitments to safeguarding jobs.

The programme will allow workers to receive up to 70% of gross wages, with the state reimbursing firms up to 85% if the programme is tapped before July and 80% afterwards.

While employers will have to commit to saving jobs, unions will have to support a company using the new scheme. Meanwhile, workers’ time not spent on the job would have to be used for training, with the state taking on up to 80% of the cost.

Reporting by Caroline Paillez; writing by Leigh Thomas; editing by Richard Lough

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